Section 75 of the Consumer Credit Act 1974

How can Section 75 protect you?

Section 75 of the Consumer Credit Act can help when your credit card purchases go wrong

Is this the same for a finance agreement with a bank?

What if you signed an agreement without paying a deposit?

Do you just get the payments you made using your credit card?

All of those questions are answered below but as a general rule: It’s always a good idea to pay for goods or services using your credit card.

What is Section 75?

Whether you purchase a service or a product from a business, if that business is in breach of contract, or is untruthful about the goods or service you are receiving, you can actually claim the total amount you paid from your credit card company. This is because of valuable consumer protection under Section 75 of the Consumer Credit Act 1974 (“CCA 1974”)

Under Section 75, the supplier and your credit card company are joint and severally liable. This means you can pursue either the credit card company or the seller when things go wrong.

Neither claim carries more weight than the other, but it’s a good idea to pursue your credit card company first, especially if the supplier has gone out of business. It may also be better to claim against the credit card company for overseas transactions as it provides a better level consumer protection. An overseas seller is going to be difficult pursue unlike UK based credit card company

Section 75 applies where the price of a single item is at least £100 and not more than £30,000. You don’t even have to pay for the full purchase price using your credit card. For the protection of Section 75 to be available, you could pay just £100 by credit card and the rest by cash and your credit card company will be liable for the full amount.

There are many circumstances when you might be able to fall back on Section 75. For example, you purchase a product from a shop and that product is faulty and does not work; the credit card company would be accountable to you under their joint and several liability. Likewise, if the supplier of the product you purchase the item from goes bust and your order never arrives, Section 75 allows you the opportunity to recover your money.

You may also be able to claim for any further financial loss incurred as a result of the problems you’ve experienced with your purchase. For example, if you’ve booked a new flight to get you home, because the original airline you booked with went bust, you could claim for the full cost of the new flight.

Best of all, there’s no upper limit on the amount of damages you can claim. Your credit card company won’t make the process easy for you to claim against them, though. If they reject your case and you feel the decision is unfair, contact Mercantile Claims immediately and we are experts in failed 75 claims. We will undertake a thorough review of your claim and resubmit it to the credit card company and, to the Financial Ombudsman Service, if necessary.

In Summary, How Can Section 75 Claims Help You?

Section 75 of the Consumer Credit Act 1974 says that a credit card company is ‘jointly and severally liable’ for any breach of contract or misrepresentation by the company to which you have paid money for goods and services.

Part of the purchase must be made using credit, which is directly linked to the goods or the services. For this reason, it tends to be most closely associated with credit cards, but it applies equally to other credit arranged specifically for the purchase of a given product, for example, car finance. Indeed, the Consumer Credit Directive, which came fully into force on 1 February 2011, added Section 75A to increase the upper limit for creditor liability to £62,260 in certain limited cases, for breach of contract, where Section 75 does not apply.

The service you have paid for must have cost more than £100 and but not more than £30,000.

You don’t have to have paid the full amount on your credit card – the credit card company will be liable even if you made only part of the payment on your card. It is the value of the service you have paid for which is key, not the amount paid on the card.

Section 75 does not apply to Debit Cards

Chargeback

In some cases, you will have purchased a product or a service using your debit card. A debit card is different to a credit card, in that it is using your own money rather than any credit. As no credit is used, Section 75 CCA 1974 does not apply to that purchase.

However, there is a mechanism available to you, for your card issuer to reclaim money from the retailer’s bank. This is known as the Chargeback procedure. This can allow your card issuer to recover the monies paid from your bank account, using your debit card, in a number of circumstances. Those circumstances are as follows:

if you do not get the goods or services you paid for, including if the company has gone out of business;

if goods or services turned out to be faulty, counterfeit or defective (you will need to return the goods in order to get a refund in this case);

if you are charged the wrong amount, or charged twice by mistake; and,

if you are charged for a repeat payment after cancelling a subscription.

If your purchase involved Fraud, if the seller induced you into a purchase by way of fraudulent means or misrepresentations.

How does the Chargeback procedure work?

Chargeback is not a legal right, unlike Section 75 CCA 1974. We would address a chargeback claim to your debit card issuer, on one of the grounds above. Your bank will, in turn, put in a request to the retailer’s bank to return the monies. The process for managing these claims is determined by a set of rules from American Express, MasterCard or Visa.

There are no guarantees your issuer will be able to recover the money through the Chargeback procedure, or that the trader will accept that you were justified in having the money back.

This is a significant difference between Section 75 CCA 1974 and the Chargeback procedure. There is far more protection afforded to a consumer when using their credit card to pay.

Are there any time limits to when I can claim?

You should make a claim as soon as you identify the problem or are concerned about a transaction. Your card issuer usually needs to invoke the Chargeback procedure within 120 days from when you made the transaction, or when you were due to receive the goods or services. In some cases, a final deadline of 540 days can be used.

What evidence do I need to provide?

We will ask you to provide evidence to make a chargeback claim, which will include some or all of the following items: –

the name of the retailer you have paid money to;

the date you paid the money and how you paid it (in store, over the phone or online);

a detailed description of the goods or services you paid for (e.g. colour, brand, size of goods), and estimated delivery dates;

what has gone wrong with the goods or services delivery;

proof of the return of goods to the retailer, if they are faulty;

if you know that the retailer has gone out of business, you should direct your card issuer to their website (where there will likely be a message from its insolvency practitioner);

copies of any and all invoices and/or receipts received for the purchase; and,

any correspondence you have had with the retailer when trying to fix the problem.

Once we have the information we require, your claim can then be processed and sent to the bank.

How can we help with Section 75 Claims

Mercantile Claims have a dedicated team of experts that specialise in claims made under section 75 of the consumer credit act. If you are looking to make a claim or wonder if you have a case, make contact with us by simply completing our contact form or call us on 0800 470 3900 for a free initial assessment of your claim.

Our section 75 claims team will assess your case on an individual basis and if you qualify, we will deal with your claim for you. We work on a no win no fee basis so you have nothing to lose and everything to gain.

We pride ourselves on providing a professional and friendly service, ensuring we maintain an open relationship with our customers throughout the entire process.

Questions - Section 75 Claims

Section 75 Claims and the Consumer Credit Act law that governs consumer transactions can be quite daunting and here at Mercantile Claims we receive regular queries from potential claimants who want clarification over different matters. We have listed some of those queries here for you but please feel free to contact us using our contact form if you want further information. Don’t dismiss your potential claim, we may be able to help you.

Is there a time limit on Section 75 Claims?

The time limit for section 75 is six years from the date of purchase or if the goods or services were purchased by way of a loan then it is six years from the date of the final payment of the loan amount.

I have a claim with Barclaycard but need help, can you deal with Barclaycard for me?

Barclaycard are notoriously difficult to deal with as from our own experience they tend to reject claims at the first opportunity. It is not that the claims are without merit, it is that Barclaycard will try to deter consumers from making a reclaim. We have successfully challenged many claims that Barclaycard have previously rejected and refused to deal with.

I have a Tesco Credit Card and need to make a claim. Will you handle this claim for me?

Tesco are similar to Barclaycard in that they have a very high rejection rate of claims. We have achieved a high rate of success against Tescos too.

How long does a Section 75 Claim take?

This is an unknown quantity but generally from submission of claim to conclusion, it generally takes approximately 3 to 6 months. Some card providers are a lot quicker than others but again Barclaycard and Tescos are far the slowest of all of the card providers and will always be nearer the 6 months than the 3 months, from our own experience.

Can I use Section 75 to make a claim for a Holiday that was not what I paid for?

Yes, the proviso is that you spend more than £ 100.00 but no more than £ 30,000.00 on your purchase. If you purchase a holiday from a travel agent or similar and the holiday was misrepresented and you didn’t receive what you paid for, then you can make a claim providing you paid for your holiday in part or full via your credit card. Do not get this mixed up with a debit card payment, it must be a credit card.

What is the Consumer Credit Act?

The Consumer Credit Act 1974 is a piece of statutory regulation that regulates consumer contracts and is very complex in its make up. Any consumer borrowing from banks and financial organisations is regulated by this statutory regulation.

Does this Section 75 Claims deal with Hire Purchase agreements? I was mis-sold a vehicle and need to claim against the car dealership

Yes, it would cover the Mis-selling of a motor vehicle but the criteria is that the payment made must be more than £100.00 but under £ 30,000.00.

I have unauthorised credit card charges from a car hire company which I found after my holiday. Can I use section 75 to claim this back?

No, Section 75 cannot be used to dispute unauthorised credit card charges on your credit card statement. You would need to dispute the charges directly with your credit card provider and prove that the charges were unauthorised, for the credit card company to credit the amount back onto your card.

Does Section 75 apply if i used Paypal to process my credit card payment?

Under the rules of Section 75, it states that in order to make a claim under the provisions of Section 75 there has to be a debtor- creditor- supplier link, which means that the transaction must be made directly between yourself and the seller without any third party payment processor involved. Credit card companies often use this clause to reject claims. However, we have argued this point on occasions and have successfully overcome the debtor-creditor-supplier link arguments put forward by the credit card companies.

I bought something using my Barclaycard and paid for it online. The invoice was not in my name and Barclaycard say because of that they won't let me claim. Is this correct?

Third-Party situations that can invalidate Section 75: • When an item is registered to a name other than that of the cardholder; Another instance is when goods are purchased on behalf of another person. Example, a husband might use his credit card to pay for a purchase for his wife, which is then registered in the wife’s name. If something goes wrong with the purchase, credit card companies may be able to circumvent their liability under Section 75 by arguing that the purchase was made under a name other than that of the card holder. • When You Are A Secondary Cardholder; If you are not the primary named cardholder on the credit card account. Example, say that both cardholders buy the same train ticket for a service that is subsequently cancelled and you are unable to obtain a refund of the ticket cost from the train operators. The primary cardholder is entitled to a refund through Section 75, but the secondary cardholder is not.

I have suffered consequential loss as a result of a suppliers failure to supply my goods in the timeframe promised. Can I claim that loss back in addition to the amount paid to them?

It is possible to claim losses under Section 75 were a breach of contract or misrepresentation was made and the losses were a direct consequence of the breach or misrepresentation.

Who decides on the eventual outcome of my claim if the card issuer has rejected it?

Ultimately, it is your credit card provider who makes a decision as to, accept or reject your claim.

However, it is important to understand how Section 75 operates. Many consumers are led to believe that they can merely ask their credit card company for their money back without fully proving their case. This belief has been given to them by the likes of consumer champion forums and websites that often contain standard template letters and unqualified advice from consumers who may have had the odd success in using a template letter.

Not all claims are complex but they do require a certain level of skill and knowledge in order to avoid rejection of your claim, in the first instance. Breach of contract and misrepresentation can be complex areas of law and require an in-depth understanding of the principles laid down in law in order to prove that you have suffered a breach of contract or misrepresentation. It’s not sufficient to state that you have suffered a breach of contract or misrepresentation without applying the principles of breach or misrepresentation, to prove your case. Getting this wrong can prejudice your claim going forward and changing your story after receiving a rejection from the bank will often lead to a lost opportunity to have made a successful reclaim.

This in saying all of this you do have options should the bank reject your claim. You are able to take your claim to the Financial Ombudsman Service who will look at your claim with fresh eyes. However, the Financial Ombudsman Service will apply the same standard of proof is what is required by the banks or a court and therefore, whilst this is a second tier of complaint, you will still have to make your case and prove your case in order to bring the matter to a successful conclusion. The Financial Ombudsman Service is a free service but it can be a long and drawn out process because of the volume of cases the Ombudsman Service deal with on an ongoing basis.

Your last option is to commence legal proceedings through your local County Court. This is probably the riskiest and most expensive way of making a claim against your credit card provider and should you lose your case, depending on the value of your claim, you could find yourself having to pay your credit card providers costs as well as suffering the loss of the money you were claiming for.

I used my business credit card to make a purchase online and got ripped off. Does section 75 cover payments made on my business debit card?

The simple answer is ‘NO’. Section 75 only covers consumer transactions and not transactions made under company issued credit cards.

Does section 75 apply if I paid using Pay Pal, Worldpay, Amazon?

Third parties payment processes create grey area where Section 75 is concerned. Third-party payment processors include PayPal, Amazon and Worldpay, and others. If you make a payment to a retailer using one of these payment processors, the debtor-creditor-supplier relationship can be considered to be broken.

The reason for the murkiness: Section 75, now more than 40 years old, was created before the arrival of new payment technologies, so the legislation doesn’t cover when external payment agents are part of the transaction.

Third-Party that can invalidate Section 75:

• When You Use An Agent; A consumer purchases a flight or a holiday through a travel agent or other agent, or a holiday accommodation website lists properties on behalf of individual owners. The creditor-debtor-supplier link is deemed to be broken by the involvement of a third party.

• When You Are A Secondary Cardholder; If you are not the primary named cardholder on the credit card account. Example, say that both cardholders buy the same train ticket for a service that is subsequently cancelled and you are unable to obtain a refund of the ticket cost from the train operators. The primary cardholder is entitled to a refund through Section 75, but the secondary cardholder is not.

• When an item is registered to a name other than that of the cardholder; Another instance is when goods are purchased on behalf of another person. Example, a husband might use his credit card to pay for a purchase for his wife, which is then registered in the wife’s name. If something goes wrong with the purchase, credit card companies may be able to circumvent their liability under Section 75 by arguing that the purchase was made under a name other than that of the cardholder.

Why use Mercantile Claims?

We strive to fulfil our company philosophy of “exceeding the clients expectations”

We do not operate as solicitors and are therefore able to keep our costs low and affordable

We are an independent company of legally trained professionals who operate within the ethics laid down within the legal profession

We are committed to providing a professional service for and on behalf of our clients, ensuring all work is completed to the highest standard managed in a confidential manner

Our traditional values combined with a modern approach to client service means we keep you informed of the progress of your claim throughout from initial enquiry through to receipt of financial settlement

Should your matter require further specialist assistance we use our own preferred barristers with whom we have a close working relationship

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Legals

Mercantile Claims is regulated and authorised by the Financial Conduct Authority in respect of regulated claims management activities.Registration number: 831699.Our registration is recorded at www.fca.org.uk.